TKO Reports First Quarter 2024 Results
TKO Group Holdings, Inc. reported strong financial results for the first quarter of 2024, with revenue of $629.7 million and a net loss of $249.5 million. The company increased its full-year 2024 revenue and Adjusted EBITDA guidance to $2.610-$2.685 billion and $1.185-$1.205 billion, respectively. TKO settled all claims related to UFC antitrust lawsuits for $335 million. Operational highlights include record-setting live events for UFC and WWE, as well as new media rights agreements.
Strong first-quarter revenue of $629.7 million.
Increased full-year 2024 revenue guidance to $2.610-$2.685 billion.
Increased full-year 2024 Adjusted EBITDA guidance to $1.185-$1.205 billion.
Settlement of UFC antitrust lawsuits for $335 million.
Record-setting live events for UFC and WWE.
New media rights agreements with Netflix and NBCUniversal.
Net loss of $249.5 million for the first quarter of 2024.
Decrease in cash flows generated by operating activities.
High gross debt of $2.752 billion as of March 31, 2024.
Legal settlement of $335.0 million related to a UFC antitrust matter.
Insights
Reviewing TKO Group Holdings, Inc.'s reported first quarter financials, a marked 105% increase in revenue to $629.7 million is notable, signaling effective monetization of recent strategic moves, including the successful combination of UFC and WWE. However, net loss expanded significantly to $249.5 million, compared to a net income in the prior year. A substantial portion of this loss is attributable to a one-time legal settlement of $335 million, which should be considered an exceptional item when analyzing the company's baseline operational performance. Adjusted EBITDA showed strength, growing 63% to $282.2 million, which is an encouraging indicator of operational efficiency.
The increase in full-year 2024 revenue and Adjusted EBITDA guidance suggests management's confidence in sustained growth and improved profitability. However, investors should consider the revised Free Cash Flow Conversion target, now above 40%, down from the previous expectation of over 50%. The lowered conversion rate is primarily due to anticipated settlement payments for the UFC antitrust lawsuits, a reminder of the potential volatility and unpredictability associated with ongoing litigation impacts.
TKO's stock will likely be influenced by the market's perception of the balance between these record-setting live events and brand partnerships versus the weight of legal settlements and increased expenses. The company's repurchase of 1.9 million shares could be seen as a bullish signal of self-investment, yet investors must weigh this against the overall context of increased corporate expenses and debt load, with gross debt reported at $2.752 billion.
The strategic merger forming TKO has capitalized on UFC and WWE's complementary strengths, as seen by the significant viewership and attendance records set by recent events. The venture into a long-term media rights deal with Netflix and continuation with NBCUniversal for WWE Raw exemplifies a forward-looking approach to content distribution, likely to enhance future revenue streams. This factor, combined with the record-setting WrestleMania XL event, underscores the company's strong performance in the live events sector, a critical growth driver for both audience engagement and revenue generation.
Notably, the successful launch of Prime Hydration as WWE's “Official Hydration Drink Partner” marks an expansion into strategic brand partnerships, creating additional verticals for monetization. This is a positive indicator of TKO's potential to attract and retain major sponsorship deals, leveraging its unique positioning within the sports entertainment industry.
Investors should consider the potential of these partnerships and media deals to offset the short-term financial challenges posed by the legal settlements. The synergies expected from the UFC and WWE merger, particularly the cost reduction initiatives and planned synergies, could lead to enhanced margins and profitability in the long term, despite the current impact on Free Cash Flow Conversion.
The settlement of the UFC antitrust lawsuits for $335 million, payable in installments, represents a clearing of significant legal hurdles for TKO. This resolution removes a layer of uncertainty and potential risk for investors, contributing to a more stable outlook for the company's future. It is important to note that such settlements, while costly, can be preferable to the potential damages and prolonged litigation costs of ongoing legal battles.
The deductibility of the settlement for tax purposes is a mitigating factor that may cushion the financial impact. Investors should remain mindful of the timing and scale of these payments, as they will affect cash flow and potentially weigh on the company's financial flexibility in the short term. Looking ahead, the anticipated court approval is a procedural step that bears watching, as any complications could influence investor perceptions and the stock's performance.
Updates Full Year 2024 Guidance
TKO Transaction Highlights
On September 12, 2023, Endeavor and WWE closed the transaction to combine UFC and WWE to form a new, publicly listed company, TKO Group Holdings, Inc. Reported results presented in this earnings release prior to September 12, 2023 reflect only UFC activity.
First Quarter 2024 Financial Highlights
-
Revenue of
$629.7 million -
Net loss of
$249.5 million -
Adjusted EBITDA1 of
$282.2 million
First Quarter 2024 Operational Highlights and Recent Developments
- UFC held 11 events, including five with live audiences, that consistently delivered strong viewership and attendance and set several all-time records for gross revenue at the respective arenas
-
In April, UFC 300 was one of the most successful and highest-grossing events in UFC history with a gate of
$16.5 million Las Vegas - WWE held 47 events, including two premium live events. Each WWE premium live event (Royal Rumble and Elimination Chamber) delivered all-time records for gross revenue and viewership for the respective event
-
WWE entered into a long-term media rights agreement with Netflix for Raw beginning in January 2025; subsequently, WWE entered into a
$25 million USA Network for the fourth quarter of 2024 -
In April, WrestleMania XL was held at Lincoln Financial Field in
Philadelphia over two consecutive nights in front of a combined 145,298 fans. WrestleMania XL was the highest-grossing event in WWE history, increasing78% as compared to the previous record set at WrestleMania 39. Prime Hydration, the exclusive “Official Hydration Drink Partner” of WWE, became the first partner to ever appear on the center of the WWE ring -
TKO reached an agreement to settle all claims asserted in both UFC antitrust lawsuits for an aggregate amount of
$335 million
Full Year 2024 Guidance
-
The Company increased its target for revenue to
$2.61 0 billion$2.68 5 billion -
The Company increased its target for Adjusted EBITDA to
$1.18 5 billion$1.20 5 billion -
The Company revised its target for Free Cash Flow Conversion2 to in excess of
40%
“TKO is off to a strong start in 2024 with multiple record-setting live events, new brand partnerships, and media rights deals for WWE Raw,” said Ariel Emanuel, Executive Chair and CEO of TKO. “With our momentum in the first quarter and solid financial results, we have raised our full year 2024 guidance. We also reached an agreement to settle all claims asserted in both UFC antitrust lawsuits. These positive developments, along with the strength in our underlying businesses, give us more conviction than ever in the combination of UFC and WWE, and in TKO’s ability to deliver sustainable long-term value for shareholders.”
First-Quarter Consolidated Results
Revenue increased
Net Loss was
Adjusted EBITDA1 increased
Cash flows generated by operating activities were
Free Cash Flow2 was
Cash and cash equivalents were
Results by Operating Segment3
The schedule below reflects TKO’s performance by operating segment:
|
|
Three Months Ended |
||||||
(in millions) |
|
March 31, |
||||||
|
|
2024 |
|
2023 |
||||
Revenue: |
|
|
|
|
|
|
||
UFC |
|
$ |
313.0 |
|
|
$ |
306.7 |
|
WWE |
|
|
316.7 |
|
|
|
— |
|
Total Revenue |
|
$ |
629.7 |
|
|
$ |
306.7 |
|
|
|
|
|
|
|
|
||
Adjusted EBITDA: |
|
|
|
|
|
|
||
UFC |
|
$ |
195.1 |
|
|
$ |
186.3 |
|
WWE |
|
|
140.2 |
|
|
|
— |
|
Corporate |
|
|
(53.1 |
) |
|
|
(13.7 |
) |
Total Adjusted EBITDA |
|
$ |
282.2 |
|
|
$ |
172.6 |
|
UFC
First Quarter 2024
Revenue increased
|
|
Three Months Ended |
||||
(in millions) |
|
March 31, |
||||
|
|
2024 |
|
2023 |
||
UFC Revenue: |
|
|
|
|
|
|
Media Rights & Content |
|
$ |
214.5 |
|
$ |
224.1 |
Live Events |
|
|
35.3 |
|
|
31.4 |
Sponsorship |
|
|
48.6 |
|
|
38.0 |
Consumer Products |
|
|
14.6 |
|
|
13.2 |
Total Revenue |
|
$ |
313.0 |
|
$ |
306.7 |
Adjusted EBITDA increased
Adjusted EBITDA margin increased to
WWE
First Quarter 2024
As a result of the timing of the consummation of the business combination on September 12, 2023, the information below includes WWE’s reported results for the three months ended March 31, 2024. The presentation of WWE’s historical information provided for the three months ended March 31, 2023 is for illustrative purposes to facilitate an understanding of its historical operating results prior to the consummation of the business combination. (See “Basis of Presentation” for further details.)
Revenue was
WWE revenue was
|
|
Three Months Ended |
||||
(in millions) |
|
March 31, |
||||
|
|
2024 |
|
2023 |
||
WWE Revenue: |
|
|
|
|
|
|
Media Rights & Content |
|
$ |
221.1 |
|
$ |
— |
Live Events |
|
|
50.2 |
|
|
— |
Sponsorship |
|
|
13.8 |
|
|
— |
Consumer Products |
|
|
31.6 |
|
|
— |
Total Revenue |
|
$ |
316.7 |
|
$ |
— |
Adjusted EBITDA was
WWE Adjusted EBITDA was
Adjusted EBITDA margin was
Corporate
First Quarter 2024
Corporate Adjusted EBITDA was a loss of
Including WWE activity for the period from January 1, 2023 through March 31, 2023, Corporate combined Adjusted EBITDA3 was a loss of
Other Matters
For the three month period ended March 31, 2024, the Company’s consolidated pre-tax results included
As previously disclosed, on September 12, 2023, Endeavor Group Holdings Inc. (“Endeavor”) and World Wrestling Entertainment, LLC (“WWE”) closed the transaction to combine the Ultimate Fighting Championship (“UFC”) and WWE to form a new, publicly listed company, TKO Group Holdings, Inc. (“TKO”). For the three months ended March 31, 2024 and 2023, the Company’s consolidated pre-tax results included
Full Year 2024 Guidance
In February, the Company issued revenue and Adjusted EBITDA guidance of
In February, the Company issued full year 2024 Free Cash Flow Conversion guidance of in excess of
The Company intends to provide additional detail related to its 2024 guidance on today’s earnings call.
Return of Capital to Shareholders
As previously disclosed, in April 2024, the Company repurchased approximately 1.9 million shares of Class A common stock for
Notes
| (1) | The definition of Adjusted EBITDA can be found in the Non-GAAP Financial Measures section of the release on page 7. A reconciliation of Net Income to Adjusted EBITDA for the three month periods ended March 31, 2024 and 2023 can be found in the Supplemental Information in this release on page 14. |
|
| (2) | The definition of Free Cash Flow and Free Cash Flow Conversion can be found in the Non-GAAP Financial Measures section of the release on page 7. A reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow for the three month periods ended March 31, 2024 and 2023 can be found in the Supplemental Information in this release on page 15. |
|
| (3) | An explanation of the basis of presentation can be found in this release on page 8. |
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under
The Company defines Adjusted EBITDA as net income excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
TKO management believes that Adjusted EBITDA is useful to investors as it eliminates the significant level of non-cash depreciation and amortization expense that results from its capital investments and intangible assets, and improves comparability by eliminating the significant level of interest expense associated with TKO’s debt facilities, as well as income taxes which may not be comparable with other companies based on TKO’s tax and corporate structure. Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate TKO’s consolidated operating performance.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of TKO’s results as reported under GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on TKO’s debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any cash requirement for such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items that are reflected in TKO’s statements of cash flows.
TKO management compensates for these limitations by using Adjusted EBITDA and Adjusted EBITDA margin along with other comparative tools, together with GAAP measurements, to assist in the evaluation of TKO’s operating performance.
Adjusted EBITDA and Adjusted EBITDA margin should not be considered substitutes for the reported results prepared in accordance with GAAP and should not be considered in isolation or as alternatives to net income as indicators of TKO’s financial performance, as measures of discretionary cash available to it to invest in the growth of its business or as measures of cash that will be available to TKO to meet its obligations. Although TKO uses Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of its business, such use is limited because it does not include certain material costs necessary to operate TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by TKO, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of TKO’s most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
The Company defines Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. TKO views net cash provided by operating activities as the most directly comparable GAAP measure. Free Cash Flow Conversion is defined as Free Cash Flow divided by Adjusted EBITDA. Although they are not recognized measures of liquidity under
Reconciliations of the Company’s Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion guidance to the most directly comparable GAAP financial measures cannot be provided without unreasonable efforts and are not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations and certain other items reflected in our reconciliation of historical Adjusted EBITDA and Free Cash Flow, the amounts of which, could be material.
Basis of Presentation
As a result of the timing of the consummation of the business combination on September 12, 2023, TKO’s consolidated financial information presented herein includes UFC’s results for the three months ended March 31, 2024 and 2023, includes WWE’s results for the three months ended March 31, 2024 and includes results for both UFC and WWE as of December 31, 2023.
Information in this release includes results for the WWE segment and Corporate on a combined basis to include periods prior to the business combination. Information presented on a combined basis does not reflect any pro forma adjustments or other adjustments for costs related to integration activities, cost savings or synergies that have been or may be achieved if the business combination occurred on January 1, 2023.
Effective September 12, 2023, the Company operates its business under two reportable segments, UFC and WWE. The UFC segment consists entirely of the operations of the Company’s UFC business which was the sole reportable segment prior to the acquisition of WWE, while the WWE segment consists entirely of the operations of the WWE business acquired on September 12, 2023. In addition, it reports results for the “Corporate” group, which incurs expenses that are not allocated to the business segments. The Corporate group consists of general and administrative expenses that relate largely to corporate activities, including information technology, facilities, legal, human resources finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support both reportable segments. Corporate expenses also include service fees paid by the Company to Endeavor under the Services Agreement. All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation. The profitability measure employed by the Company in assessing operating performance, including that of its segments, is Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA includes amortization expenses directly related to supporting the operations of the Company’s segments, including content production asset amortization.
Additional Information
As previously announced, TKO will host a conference call at 5:00 p.m. ET on May 8, 2024, to discuss its first quarter 2024 results. All interested parties are welcome to listen to a live webcast that will be hosted through the Company’s website at investor.tkogrp.com. Participants can access the conference call by dialing 1-833-470-1428 (conference ID: 099344). Please reserve a line 5-10 minutes prior to the start time of the conference call.
Any accompanying materials referenced during the call will be made available on May 8, 2024, at investor.tkogrp.com. A replay of the call will be available approximately two hours after the conference call concludes and can be accessed on the Company’s website.
About TKO
TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and entertainment company. TKO includes UFC, the world’s premier mixed martial arts organization, and WWE, the recognized global leader in sports entertainment. Together, our organizations reach more than 1 billion households in approximately 210 countries and territories, and we organize more than 300 live events year-round, attracting more than two million fans. TKO is majority owned by Endeavor Group Holdings, Inc. (NYSE: EDR), a global sports and entertainment company.
Website Disclosure
Investors and others should note that TKO announces material financial and operational information to its investors using press releases, SEC filings and public conference calls and webcasts, as well as its Investor Relations site at investor.tkogrp.com. TKO may also use its website as a distribution channel of material information about the Company. In addition, you may automatically receive email alerts and other information about TKO, UFC and WWE when you enroll your email address by visiting the “Investor Email Alerts” option under the Resources tab on investor.tkogrp.com.
Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding TKO’s business strategy and plans, financial condition, and anticipated financial or operational performance. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to: TKO’s ability to generate revenue from discretionary and corporate spending on events; TKO’s dependence on key relationships with television and cable networks, satellite providers, digital streaming partners and other distribution partners; TKO’s ability to adapt to or manage new content distribution platforms or changes in consumer behavior; adverse publicity concerning the Company or its key personnel; the highly competitive, rapidly changing and increasingly fragmented nature of the markets in which TKO operates; financial risks with owning and managing events for which TKO sells media and sponsorship rights, ticketing and hospitality; risks related to the integration and realization of the expected benefits of the business combination of UFC and WWE; the Company’s substantial indebtedness; and other important factors discussed in the section entitled “Risk Factors” in TKO’s final prospectus on Form 424(b)(3) filed with the United States Securities and Exchange Commission (the “SEC”) on September 19, 2023, as any such factors may be updated from time to time in TKO’s other filings with the SEC, including, without limitation, TKO’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed by TKO, accessible on the SEC’s website at www.sec.gov and TKO’s investor relations site at investor.tkogrp.com. Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, TKO undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
TKO Group Holdings, Inc. Consolidated Income Statements (In millions, except per share data) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2024 |
|
2023 |
||||
Revenue |
|
$ |
629.7 |
|
|
$ |
306.7 |
|
Operating expenses: |
|
|
|
|
|
|
||
Direct operating costs |
|
|
201.0 |
|
|
|
89.2 |
|
Selling, general and administrative expenses |
|
|
531.9 |
|
|
|
56.3 |
|
Depreciation and amortization |
|
|
107.1 |
|
|
|
15.2 |
|
Total operating expenses |
|
|
840.0 |
|
|
|
160.7 |
|
Operating (loss) income |
|
|
(210.3 |
) |
|
|
146.0 |
|
Other expenses: |
|
|
|
|
|
|
||
Interest expense, net |
|
|
(64.5 |
) |
|
|
(53.9 |
) |
Other expense, net |
|
|
(0.3 |
) |
|
|
(0.3 |
) |
(Loss) income before income taxes and equity losses of affiliates |
|
|
(275.1 |
) |
|
|
91.8 |
|
(Benefit from) provision for income taxes |
|
|
(25.5 |
) |
|
|
3.6 |
|
(Loss) income before equity losses of affiliates |
|
|
(249.6 |
) |
|
|
88.2 |
|
Equity (earnings) losses of affiliates, net of tax |
|
|
(0.1 |
) |
|
|
0.3 |
|
Net (loss) income |
|
|
(249.5 |
) |
|
|
87.9 |
|
Less: Net (loss) income attributable to non-controlling interests |
|
|
(145.7 |
) |
|
|
0.3 |
|
Less: Net income attributable to TKO Operating Company, LLC prior to the Transactions |
|
|
— |
|
|
|
87.6 |
|
Net loss attributable to TKO Group Holdings, Inc. |
|
$ |
(103.8 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
||
Basic and diluted net loss per share of Class A common stock |
|
$ |
(1.26 |
) |
|
|
N/A |
|
|
|
|
|
|
|
|
||
Weighted average number of common shares used in computing basic and diluted net loss per share |
|
|
82,351,654 |
|
|
|
N/A |
|
TKO Group Holdings, Inc. Consolidated Balance Sheets (In millions) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
As of |
||||||
|
|
March 31, |
|
December 31, |
||||
|
|
2024 |
|
2023 |
||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
245.8 |
|
|
$ |
235.8 |
|
Accounts receivable, net |
|
|
171.6 |
|
|
|
135.4 |
|
Other current assets |
|
|
164.4 |
|
|
|
121.2 |
|
Total current assets |
|
|
581.8 |
|
|
|
492.4 |
|
Property, buildings and equipment, net |
|
|
611.8 |
|
|
|
608.4 |
|
Intangible assets, net |
|
|
3,483.0 |
|
|
|
3,563.7 |
|
Finance lease right-of-use assets, net |
|
|
259.9 |
|
|
|
255.7 |
|
Operating lease right-of-use assets, net |
|
|
36.4 |
|
|
|
35.5 |
|
Goodwill |
|
|
7,666.1 |
|
|
|
7,666.5 |
|
Investments |
|
|
16.0 |
|
|
|
16.4 |
|
Other assets |
|
|
67.3 |
|
|
|
52.1 |
|
Total assets |
|
$ |
12,722.3 |
|
|
$ |
12,690.7 |
|
Liabilities, Non-controlling Interests and Stockholders' Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
22.6 |
|
|
$ |
42.0 |
|
Accrued liabilities |
|
|
405.7 |
|
|
|
267.4 |
|
Current portion of long-term debt |
|
|
22.3 |
|
|
|
22.4 |
|
Current portion of finance lease liabilities |
|
|
10.9 |
|
|
|
8.1 |
|
Current portion of operating lease liabilities |
|
|
4.9 |
|
|
|
4.2 |
|
Deferred revenue |
|
|
111.8 |
|
|
|
119.0 |
|
Other current liabilities |
|
|
12.3 |
|
|
|
9.0 |
|
Total current liabilities |
|
|
590.5 |
|
|
|
472.1 |
|
Long-term debt |
|
|
2,708.4 |
|
|
|
2,713.9 |
|
Long-term finance lease liabilities |
|
|
249.2 |
|
|
|
245.3 |
|
Long-term operating lease liabilities |
|
|
33.0 |
|
|
|
32.9 |
|
Deferred tax liabilities |
|
|
372.9 |
|
|
|
372.9 |
|
Other non-current liabilities |
|
|
137.9 |
|
|
|
3.0 |
|
Total liabilities |
|
|
4,091.9 |
|
|
|
3,840.1 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Redeemable non-controlling interests |
|
|
12.4 |
|
|
|
11.6 |
|
Stockholders' equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
— |
|
|
|
— |
|
Class B common stock |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
4,275.9 |
|
|
|
4,244.5 |
|
Accumulated other comprehensive (loss) income |
|
|
(2.1 |
) |
|
|
(0.3 |
) |
Accumulated deficit |
|
|
(239.1 |
) |
|
|
(135.2 |
) |
Total TKO Group Holdings, Inc. stockholders’ equity |
|
|
4,034.7 |
|
|
|
4,109.0 |
|
Nonredeemable non-controlling interests |
|
|
4,583.3 |
|
|
|
4,730.0 |
|
Total stockholders' equity |
|
|
8,618.0 |
|
|
|
8,839.0 |
|
Total liabilities, nonredeemable non-controlling interests and stockholders' equity |
|
$ |
12,722.3 |
|
|
$ |
12,690.7 |
|
TKO Group Holdings, Inc. Consolidated Statements of Cash Flows (In millions) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(249.5 |
) |
|
$ |
87.9 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
107.2 |
|
|
|
15.1 |
|
Amortization and impairments of content costs |
|
|
7.7 |
|
|
|
3.9 |
|
Amortization of original issue discount and deferred financing cost |
|
|
2.7 |
|
|
|
2.6 |
|
Equity-based compensation |
|
|
30.2 |
|
|
|
5.8 |
|
Income taxes |
|
|
(29.8 |
) |
|
|
0.8 |
|
Equity losses of affiliates |
|
|
(0.1 |
) |
|
|
0.3 |
|
Net provision for allowance for doubtful accounts |
|
|
0.4 |
|
|
|
0.1 |
|
Other, net |
|
|
— |
|
|
|
(0.1 |
) |
Changes in operating assets and liabilities, net of acquisition: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(36.5 |
) |
|
|
(7.7 |
) |
Other current assets |
|
|
(12.5 |
) |
|
|
(13.9 |
) |
Other noncurrent assets |
|
|
(18.0 |
) |
|
|
(3.1 |
) |
Accounts payable and accrued liabilities |
|
|
129.2 |
|
|
|
(24.7 |
) |
Deferred revenue |
|
|
(7.6 |
) |
|
|
(3.9 |
) |
Other liabilities |
|
|
135.9 |
|
|
|
6.6 |
|
Net cash provided by operating activities |
|
|
59.3 |
|
|
|
69.7 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property, buildings and equipment and other assets |
|
|
(31.5 |
) |
|
|
(4.6 |
) |
Investment in affiliates, net |
|
|
(4.8 |
) |
|
|
— |
|
Proceeds from sale of property, buildings and equipment |
|
|
0.1 |
|
|
|
— |
|
Net cash used in investing activities |
|
|
(36.2 |
) |
|
|
(4.6 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Repayment of long-term debt |
|
|
(10.0 |
) |
|
|
(8.2 |
) |
Distributions to members |
|
|
(0.6 |
) |
|
|
(101.4 |
) |
Net cash used in financing activities |
|
|
(10.6 |
) |
|
|
(109.6 |
) |
|
|
|
|
|
|
|
||
Effects of exchange rate movements on cash |
|
|
(2.5 |
) |
|
|
— |
|
|
|
|
|
|
|
|
||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
10.0 |
|
|
|
(44.5 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
235.8 |
|
|
|
180.6 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
245.8 |
|
|
$ |
136.1 |
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
64.2 |
|
|
$ |
50.5 |
|
Cash payments for income taxes |
|
$ |
6.5 |
|
|
$ |
2.9 |
|
NON-CASH INVESTING AND FINANCING TRANSACTIONS: |
|
|
|
|
|
|
||
Purchases of property and equipment recorded in accrued expenses and accounts payable |
|
$ |
24.4 |
|
|
$ |
0.6 |
|
Capital contribution from parent for equity-based compensation |
|
$ |
2.8 |
|
|
$ |
5.8 |
|
Principal stockholder contributions |
|
$ |
1.5 |
|
|
$ |
— |
|
TKO Group Holdings, Inc. Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin (In millions, except percentages) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2024 |
|
2023 |
||||
Net (loss) income |
|
$ |
(249.5 |
) |
|
$ |
87.9 |
|
(Benefit from) provision for income taxes |
|
|
(25.5 |
) |
|
|
3.6 |
|
Interest expense, net |
|
|
64.5 |
|
|
|
53.9 |
|
Depreciation and amortization |
|
|
107.1 |
|
|
|
15.2 |
|
Equity-based compensation expense (1) |
|
|
30.2 |
|
|
|
5.8 |
|
Merger and acquisition costs (2) |
|
|
0.5 |
|
|
|
5.4 |
|
Certain legal costs (3) |
|
|
345.2 |
|
|
|
0.4 |
|
Restructuring, severance and impairment (4) |
|
|
9.2 |
|
|
|
— |
|
Other adjustments |
|
|
0.5 |
|
|
|
0.4 |
|
Total Adjusted EBITDA |
|
$ |
282.2 |
|
|
$ |
172.6 |
|
Net (loss) income margin |
|
|
(40 |
)% |
|
|
29 |
% |
Adjusted EBITDA margin |
|
|
45 |
% |
|
|
56 |
% |
| (1) |
Equity-based compensation represents primarily non-cash compensation expense for awards issued under Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the Replacement Awards and for awards issued under the 2023 Incentive Award Plan. For the three months ended March 31, 2024, equity-based compensation includes |
|
| (2) | Includes certain costs of professional fees and bonuses related to the TKO transaction and payable contingent on the closing of the TKO transaction. |
|
| (3) |
Includes costs related to certain litigation matters including antitrust matters for UFC and WWE, matters where Vincent K. McMahon has agreed to make future payments to certain counterparties personally and, for the three months ended March 31, 2024, the settlement of both UFC antitrust lawsuits for |
|
| (4) | For the three months ended March 31, 2024 includes costs resulting from the Company’s cost reduction program. For more information, please refer to the Company’s various filings with the SEC, including, but not limited to, Note 15, Restructuring Charges, of its Form 10-Q for the three months ended March 31, 2024. |
TKO Group Holdings, Inc. Reconciliation of Free Cash Flow (In millions) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2024 |
|
2023 |
||||
Net cash provided by operating activities |
|
$ |
59.3 |
|
|
$ |
69.7 |
|
Less cash used for capital expenditures: |
|
|
|
|
|
|
||
Purchases of property, buildings and equipment and other assets (1) |
|
|
(31.5 |
) |
|
|
(4.6 |
) |
Free Cash Flow |
|
$ |
27.8 |
|
|
$ |
65.1 |
|
| (1) |
Purchases of property, buildings and equipment and other assets for the three months ended March 31, 2024 includes approximately |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508575539/en/
Investors: Seth Zaslow szaslow@tkogrp.com
Media: press@tkogrp.com
Source: TKO Group Holdings, Inc.
FAQ
What were TKO's revenue and net loss for the first quarter of 2024?
What is TKO's revised full-year 2024 revenue guidance?
How much did TKO settle the UFC antitrust lawsuits for?
What were the operational highlights for TKO in the first quarter of 2024?
